Each week we will dive into these topics to help you make better decisions on your start-up or perhaps correct mistakes made early on. If you have any questions pertaining to any of these subjects, please feel free to contact me at bartonmorris.com or call 248-940-3907 and ask for Ian!
- Check name availability with the State of Michigan
When considering a new business, you should make sure that the name of the business is available and not already taken by someone else. The state will not allow you to name your business the same as another business. You may check the availability of names by searching for the name among all registered companies in Michigan.
- File paperwork to register the business as a corporation, partnership, LLC, or otherwise
When forming a company, the particular objectives of the business need to be understood. There are many types of business entities, including partnerships, corporations, and limited liability companies (LLCs). Choosing the right entity can be critical. Make the wrong choice, and the consequences can range from annoying to dire.
- Obtain EIN from IRS
An Employer Identification Number (EIN) allows for federal taxation and is required to open a bank account.
- Operating Agreement or Bylaws
A corporation needs bylaws, and an LLC needs an operating agreement. Regardless of the type of business you start.
- Open Bank Account
Once you have registered your business, obtained an EIN, and signed your organizational documents, you can open a bank account for your business.As we said, limiting liability and insulating owners from the liability of a company is one of the main purposes of forming a business entity. A crucial piece of limiting that liability is to maintain a strict separation of assets between the business and the owners.
Each business needs to protect itself from liability, and one means to do so is through insurance.
A bookkeeper or Certified Public Accountant can help your business avoid one of the other largest issues businesses face.
The location of your business is one of the most important decisions you will make. Some businesses need a storefront, where a downtown location would yield walk-in traffic, while other businesses may thrive in an online store.
- Licenses and Permits
Some businesses require specific licenses and permits from the state or the local municipality. Common licenses among businesses are liquor, cannabis, and lottery licenses. Other licenses and permits that are less well known:
- Skilled Trades – electrician, mechanic, plumber, builder, etc.
- Adult and Child Care – foster care, camps, aged homes, child-care centers, etc.
- Health Professionals – doctors, dentists, midwives, athletic trainers, counselors, chiropractors, speech therapists, etc.
- Occupational Professionals – accountant, architect, barber, cosmetologist, engineer, landscaper, real estate broker, etc.
- Commercial Licenses – cemeteries, funeral parlors, polygraph examiners, security guards, etc.
- Permits – boiler, building, electrical, elevator, mechanical, plumbing, ski/amusement.
- Employee vs Independent Contractor
Now that your business has been formed and has a bank account, you need to decide how the work will be accomplished. Will you hire others to help you complete the work you set out to do? Your help will be either an employee or an independent contractor.